It is Obvious

Chris Rick has got altogether too much to say


Posted by chrisrick13 on August 24, 2017

It is obvious: I can help people in need


I listened to a TED talk last week by the mayor of Albuquerque. He had put signs around the town with a toll-free number offering accommodation, food and help to anyone who needed it. Mainly homeless and beggars – the same group really. The signs were having an effect but not much. Then he saw a man standing under one of his signs begging…for a job.

In short he cut through all the problems and got what became a fleet of vans that toured the city every day. They would pull up at beggars on the pavement and offer them a days work to be dropped off back there or at a refuge at the end. They would earn enough money to buy food and accommodation and have money left over.

The scheme is saving the city millions and has all but eliminated begging and homelessness in the city. (Listen to the talk.)

I often muse on schemes to do the same with prisoners. The problem is that the homeless person can run away from the job and nothing happens. Can’t do the same with prisoners! Community service is an attempted step in that direction. I don’t know that it works that well though. My musing extends to “two years in the army” which was a solution used two generations ago but is not possible now.

The Albuquerque scheme works because there are people in a poor place who will effectively enter something close to slave labour to get out of it. The city is not a criminal organisation so helps these people and does not perpetuate their ‘slavery’. There is a gap in the market that they fill. Means and ends? There is not much harm done and a lot of good which washes away my unease.

As the mayor described it, the scheme was incredibly easy to set up.

Why can’t we do it for the deprived people on the world but concentrated in Africa?


It is obvious: I can help people in need but just giving money will not do it


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On a street near you…

Posted by chrisrick13 on August 23, 2017

It is obvious: it all works well


Do you remember? ten years ago and more. Lots of stories about US sub-prime mortgages. TV news with whole streets in towns where everyone had handed their keys in and walked away…often to homelessness.

Bit of a giggle happening so far away. Never affect us.

The US system was different as the property was the asset backing the loan so there was no comeback on the people who had taken out the loan. In the UK of course if you do it the bank will sell the house at a knock-down price and come after you for the rest. However for a lot of people, that would be a waste of time and a long, long wait for any money to come in. Indeed it is why government and BoE strategy is to boost asset prices and keep interest rates low – until they can’t. That is another story hitting a cinema near you soon enough.

While I’m at it, houses in this country are worth £9 trillion. Which pre-supposes that someone with a spare £9tr is around and willing to put their hands in their pockets. That is yet another story. The people relied on for that £9tr are first-time buyers. These are the people with £50,000 of student loan debt, wages that need them to live with mum and dad to actually have money left to buy food with, and wage decline (carefully hidden by the fudged inflation numbers that for some reason don’t include food or housing costs).

We have learnt from history though and such a scheme will not happen again. It is a variant on Einstein’s comment that to keep repeating an experiment expecting different results is insanity.

We can’t repeat history because there is a lot of change going on at rapid pace. For example driverless cars are not far away. Trying to assign blame in car crashes is a huge distraction from the important stuff. There will be far fewer of them. Insurance companies will be happy to take up the slack as they will be making a lot more money. All the cameras will make sure that accidents are very well documented. If someone runs into the back of you it is their fault. Soon enough if a crash happens between a human driven and driverless car it will automatically blamed on the human.

The model for the car manufacturers will change as they will produce cars and rent out journeys. They will soon sell few cars. Hold on though, isn’t that what is happening now? Car manufactures produce cars and the manufacturer’s finance company extends a loan so that the punter (you and me) can have possession of the car for 3 years and then hand it back. We are renting 3 years of journeys?

The residual value of the car guarantees the loan. So there is no risk. If you can no longer afford the payments you give it back. The finance company then sells it and recovers its loan. Everyone is happy. Trouble is the residual value is at £X and the value is plummeting. It means that the finance company will be lucky to get £0.5X. There is also the loss of income for the finance company as the interest on the loan is no longer being paid. The car manufacturer finance company will take the manufacturer with it if it goes bust. It will take a lot of jobs as well. Many more than a bank. I wonder if car manufacturers are too big to let fail because they all did not so long ago.

Doesn’t this sound a lot like the sub-prime home loans of 10 years ago? At lot of deja-vu still hanging around.

It is obvious: it all works well…until it doesn’t

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I’m not poor enough

Posted by chrisrick13 on July 27, 2017

It is obvious: I love a good socialist

That nice Mr Corbyn, who is going to fund the NHS and keep pensions going just when I need them whilst giving the bill to a generation I will never meet, has just said that freeing students from any tuition fees and forgiving the debt was only an ambition. He did not get enough votes from students to win so he has dumped them already. He could see that ex-trot Andrew Marr coming for him on Sunday so got out quick. Another reason to vote for him!  I’m not poor enough to avoid his other policies though.

Frank Field is the grey scowling socialist of parliament. A closer look at what he has said and done and I see a man of integrity, honesty and compassion. If he were my MP I would vote for him.

Then I return to the biggest loony-left of the lot: Tony Benn. This is the energy minister who proposed a sovereign fund from a percentage of oil revenues. The ridicule poured on him prevented us having a fund like Norway with £2trillion in it.

Then he came up with the 5 questions to ask of anyone in power. Questions for which those at the top in the EU do not have a good answer (or any answer).

I just heard that he was extremely suspicious of the EU (Common Market then) and the motives of those creating it and was against it.

If I agree with him so much what does that make me? If he was right so much what does that make him?

I’m finding it ever more difficult not to like some of these socialists.


It is obvious: I love a good socialist – I’m still finding all too many of them for my liking

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Watch out next generation – here I come

Posted by chrisrick13 on July 5, 2017

It is obvious: vote Labour

Saint Thatcher ran a government that spent less than it earned. Certainly not for all of her term as PM though. Not happened since and I wonder that it will happen again.

Somehow the debt that this country owes will have to be paid off some time. Mostly, at least. The austerity route is not liked by the population. This attempts to squeeze over a long period and spread the suffering, but not a lot of it. Trouble is that one man’s austerity is another man’s cuts. To do it even-handedly is impossible.

NHS, education and pensions are heavily protected. Does not leave much to ‘austere’.

Better to keep going as we are and then have a big disaster and everyone can suffer badly. ‘Dunkirk spirit’…but don’t get me started on keeping the Germans from running this country like that nice Mr Hitler wanted to.

We will get equality for most of us because if there is no food in the shops then the government will start rationing and only the very rich and the criminal classes will get around it…oh dear.

It isn’t going to happen yet. I am as sure of it as I am that it will happen.

Trying to find triggers but not happened on one yet. I notice that car loans are treading a similar path to houses from 10 years ago. I wonder if that will be not so much a trigger as a full-blown reason?

It bothers me that the next generation and the one after (and maybe a few more after that) will pay for the lifestyle I lead. Or rather it did. Why should I care? I’m not going to be around for most of those generations. I have done my time paying for today’s pensioners which I have now joined.

I think that the Labour party have the right idea. They are going to borrow and spend. They will spend on the NHS of which I am likely to become a big customer of soon. They will put money into social services and I can see that I might avail myself of a deal of that. That nice Mr Corbyn is going to borrow £250bn and spend it over and above the government overspend. Got to be a lot of it coming my way.

I will vote Labour from now on.


It is obvious: vote Labour – if you are old


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Oh Dear

Posted by chrisrick13 on June 23, 2017

It is obvious: in the Brexit negotiations the government has the pick of the country’s negotiators to use to get us a good deal


I’m not a good negotiator. Eventually I realised that I could learn about it and if I knew what was going on then I could improve. At the very least I can spot when the other side is playing a ‘trick’.


There are obvious ones like good-guy/bad-guy. Everyone knows that? But then there is time pressure and the nibble. Never volunteer information. Many others.

I have two favourites: the silent close and enumerating. I use both of these techniques a lot.

One of the big mistakes that novice negotiators make is to try to negotiate by giving. They think that by giving a gift the other side will reciprocate. This never works with an experienced negotiator. They just take the gift and ask for more.  Let me give an example from today:

Theresa May: We will give all the EU citizens a good deal staying in the UK.

Donal Tusk: that’s not good enough.

The obvious starting point is:

Theresa May: we might be interested in some benefits for EU residents – what can you offer in return.

If you set out your conditions then the only direction is away from them to a lesser position.  Ask for something ridiculous and you might be able to get to what you want but the other side is very likely to ask for something equally ridiculous back.


It is obvious: in the Brexit negotiations the government has the pick of the country’s negotiators to use to get us a good deal – pity we’re not using any of them.


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I’ve got a spec in my eye

Posted by chrisrick13 on June 20, 2017

It is obvious: you can’t rely on foreigners

Have you noticed? Japan has a debt at over 200% of its GDP. That’s OK because it owes the debt to the inveterate savers of the country. Is it that it easy to take the money away from your own population and nobody else will care?

Japan was a dominant force in the world economy 25 years ago. Now it is still a large economy but there are many problems. The demographics of the country are not good…at least until all the old people die off and then there is a virtuous circle. There are some large Japanese corporations that are all but bankrupt. I wonder how the average Japanese in the street thinks about the government decision to buy millions of Yen’s worth of Mitsubishi bonds?

Just a short distance away is China. It’s debt to GDP ratio is over 250%. Not much of that was lent by the Chinese people! Economics has moved away from the history books but when a country starts expansionism it is often to hide internal problems and we can all see what China is doing in the South China Sea. Another indicator is the large numbers of rich Chinese ‘getting out’.

I have also started frequently reading the comment ‘hard landing’ applied to China. When the world’s largest economy suddenly changes its path then there will be a lot of turmoil one way or another.

So the world’s two largest economies are in what can best be called unstable states. Third up, Japan, is in a third ‘lost decade’. Europe including the UK is also in a state that is at best unstable. One of the BRICs has already collapsed – Brazil. Russia is suffering with the low oil price and that is on a nice downward trend at the moment. Russia only has oil. It does not have a good industrial base or strong agriculture. Africa will grow to significance one day but not for a long time.

We have come a long way down the order of things to arrive at India. Will India save the world economy? I don’t think so.


I have just thought of a way for the UK to resolve its economic problems. There is plenty of precedent with Mr Carney running the UK economy. Eddie Jones running the English rugby team and Mr Gatland running the Welsh. We need a new man at the treasury.  A foreigner.  Mr Mugabe will soon be done with his current job. He did so well with the economy of his country…

It is obvious: you can’t rely on foreigners they’ve learnt from us how to screw things up

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…a lot of sheep and lemmings around as well

Posted by chrisrick13 on June 20, 2017

It is obvious: the Bank of England knows what it is doing

Mr Carney spoke yesterday.  There is plenty of analysis on the WWW.  He appointed a new external member of the MPC.  This is someone who has expressed views exactly in line with his – as difficult as they are to discern.

If I were Mr Carney I would do the same.  That is why I would expect that the choice of person would be out of his hands.

We have something that is at the heart of the economy of this country – the base rate.  The MPC sets the base rate and is now full of people who will do exactly what Mr Carney wants.  So we have handed the control of the economy to a Canadian chosen by a politician who is no longer around.

I have to go back to Tony Benn’s five rules of democracy

“What power have you got?”    Absolute.

“Where did you get it from?” Given by another individual…democracy?

“In whose interests do you use it?”    I don’t know but not the UK

“To whom are you accountable?”    Nobody.

“How do we get rid of you?”     Have to wait until your term is up or you decide to go.

It’s not as if he is any good at his job.  Look at his forward guidance and the forecasting record of the BoE.

What is happening is that there is a huge dislocation coming in the finance system of the world.  Those at the levers are merely delaying it instead of tackling the problem or preparing for the dislocation.  What they cannot do is ever to admit that there is a problem.  It is the emperor’s clothes in reverse.  Everyone can see it, just that those in charge have to deny it.

How and when it will happen I am unable to predict.  Greece might cause it.  Portuguese banks.  Italy.  The UK.  North Korea.  The result of the Lions test series.

What will happen in the UK is that there will be a run on the pound that is only defended by interest rate rises…which just cannot happen.  This would have millions kicked out of their houses.  I had a mortgage for many years when interest rates were in double figures.  For many who are ‘JAMs’ this will mean their mortgage payments will increase by a factor of 5.  Lots of barbed wire.  Back bedroom full of tins of baked beans.  Shotgun and lots of cartridges.

Don’t worry though – Mr Carney has it covered…until he cuts and runs.  Less than 2 years now.

It is obvious: the Bank of England knows what it is doing.  Exactly what Mr Carney wants it to for his best interest.

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Watch out! A plague of Turkeys and now Goldfish.

Posted by chrisrick13 on June 19, 2017

It is obvious: a week is a long time in politics

The EU negotiators are hounding the UK to start negotiations.  I find it odd that nobody mentions that the EU refused to start any negotiation until the French election was over.  They were also including the German election date but have rode back from that because of the ‘good’ French result.

I have heard that the EU have also refused to start negotiating until the UK agrees to pay £40bn compensation to the EU.  Someone not used to negotiating (most people) might not realise that it is itself the start of negotiations!  I wonder if we will soon be negotiating over seating positions at the table?  Something my generation knows about only too well.

Less than 2 months ago the Conservatives took hundreds of seats off the Labour party in local government elections.  Less than 2 weeks ago the Conservatives polled more votes than in the previous election.  This is not a party in disarray!  Mr Corbyn has been better advised than Mrs May but I wonder that he can keep it up?

It is obvious: a week is a long time in politics and a lot longer than the memory of most people.

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The slippery slope

Posted by chrisrick13 on June 13, 2017

It is obvious: I used to worry about how little oil there is left


Last week it I heard that more than 50% of the UK electricity consumption came from renewable sources. The list quote included nuclear. I think that stretches things a little. Though maybe a fast breeder power station does do it? Other than that Thorium and Uranium are not renewable.

If I climb out of the nuclear hole I have dug for myself then all energy comes from the sun. The primary source. Oil is just energy from the sun that stored away for a long time. Solar is much more recent energy. Wind, wave, tidal, hydro-electric are all taking energy from the stored kinetic energy of a spinning earth. I think that ultimately comes from the sun?  It is large enough that we’ll be pressed to slow the rotation by even a second over the next several thousand years.  Not renewable though.

Oil consumption has crept up. Can’t understand why there is more consumption at $50 barrel than there was at $120+. Price should have moved? If not why not?

Electricity production has moved away from oil of which there was not much. It is using gas and coal…and renewables.

A step down from burning oil in car engines is not far away. No energy-saving as such but it will come via renewable sources. More efficient use will soon be here with driverless cars and the move from owning to renting as needed.

The sailing ship phenomenon has exhibited itself with the improvements in oil extraction methods. (Interesting that after all this time Saudi Arabia is selling off its oil reserve. A good reason for that…?)

So I predict no big oil crunch for my lifetime (and I just predicted 352 seats for the Conservatives in the general election). I think an oil crisis could well be managed some long distance into the future. Do not forget that nuclear fusion is probably going to happen over the next 20 years.

When oil runs out in certain places interested parties queueing up to settle a few scores will be a bigger risk ever than oil running out.


It is obvious: I used to worry about how little oil there is left – I’ve got more important stuff to worry about now

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Put the oven on

Posted by chrisrick13 on June 9, 2017

It is obvious: Christmas is early this year


The country has had enough of austerity. For any number of reasons the young voted for Labour but one of them was wanting to be done with austerity.

Why is austerity even talked about let alone become a part of Conservative policy? The reason is that as a nation we have borrowed more than we produce each year. This money will have to be paid back…sometime. It is not an invention of the Conservatives it is a (poor) response by them to do something about it before it becomes a problem. That is saying it too nicely. Need to do something before an utter disaster strikes.

The finances of a country are like yours and mine but not the same. Beware. A country can borrow and be quite profligate. The lenders know that the peasants will be whipped into the fields to work to pay off the debt…look at Ireland and eventually Greece.

Some overspend is looked on as good governance, but too much… It is paid off in one of several ways. Decent inflation robs the lenders and mostly that is the population. Strong growth allows maintenance of the interest payments so the can is kicked. Problem is that at some point the exponential curve takes over. This is why debt to GDP ratio of 80% is recognised as a step too far. The government can squeeze taxes and cut spending. Over a long period were it maintained then the debt could be reduced.

If you don’t succeed with at least one of those then the country will default on its debts and the lenders suffer. There follow many years of extreme pain as the lenders take their revenge and then the country is rehabilitated.

The problem with any success at paying off debt is that a new government will come along and spend it again. So paying debt off never works.

What do all these scenarios have in common? The money is spent now for the benefit of the older generation and the next generation (or the one after) has to pay the bill and/or suffer the pain.

This next generation is the one that has just supported Labour in large numbers. This is the Labour party that will continue to run up national debt and proposes to set up a bank to borrow a further £250bn and spend it…for that generation to pay off.

Do I care? At 66, no I do not.


It is obvious: Christmas is early this year – the turkeys have been out in force voting.

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